Gilroy, Sharks Ice continue talks as construction costs widen funding gap

Gilroy officials told residents they remain engaged with Sharks Ice on a proposed public-private ice facility but that construction-cost inflation has increased the project's price, creating a notable funding gap the parties are trying to close.

City leaders described an ad hoc committee made up of council members and staff that is negotiating with the Sharks organization. Officials said the original concept and earlier cost estimate near $30 million have been eclipsed by higher current construction costs, and one council member estimated a remaining shortfall in the mid-teens of millions.

The city would contribute the property for the facility and some capital infrastructure improvements (paid with impact fees tied to development), while the Sharks organization would run the facility and provide programming that includes youth literacy incentives and wellness programs with local schools. "We are not investing millions of dollars — it's the organization that's going to be running it; they are investing their money," Mayor Braco said, adding that the city values the economic-development and youth-programming benefits the facility would bring.

Council members emphasized caution with public funds and said staff are assessing creative financing and cost-sharing options to close the gap. They noted ancillary benefits such as potential hotel, retail and recreational spending near the site if the project proceeds.

Next steps: the ad hoc committee and staff will continue negotiations to refine scope, cost-sharing and timing; no final agreement or formal council vote was reported at the Coffee with the Mayor.